Interview: Martin Slabbert, CEO of South African investment fund NEPI, says the fund has kept its faith in the local real estate market and reveals that it is still on the lookout for Romanian opportunities, with no maximum budget to constrain it »page 6
TELECOM LICENSES
THE GOVERNMENT IS CLASHING WITH MOBILE OPERATORS OVER THE DETAILS OF THE UPCOMING AUCTIONING OF SPECTRUM IN THE LOCAL BANDWIDTH
ROMANIA’S PREMIERE BUSINESS WEEKLY
March 19 - 25, 2012 / VOLUME 16, NUMBER 9
»PAGE 10
PLOUGHING PROFIT FROM FARMS
Despite the poor state of local agricultural equipment and fragmented farmland, banks are fighting for the custom of agricultural companies. BR digs deep to find out why »page 8
3Q
NEWS
NEWS
POWER
FILM REVIEW
Channel vision
Cash injection
Creaming it in
Green light?
The Kid with a Bike
Cable provider RCD&RDS is entering the world of content provision by starting its own television channel, Digi 24 » page 3
Medicover expects its new 7,000-sqm private hospital in Bucharest to generate EUR 4 million in revenue this year » page 4
Dairy company Olympus has secured a EUR 30 million loan from BSTDB to help the Greek firm boost its production capacity » page 4
Romania’s renewable energy industry is being bolstered by the green certificate scheme – but players say challenges remain » page 12
The Dardenne brothers’ latest feature impressed Cannes with its combination of realism and fairy tales. BR shares its verdict » page 14
www.business-review.ro Business Review | March 18 - 25, 2012
NEWS 3
NEWS in brief
3Q Valentin Popoviciu
AGRICULTURE Extension of farmland acquisition ban for foreigners ‘highly unlikely’
business development RCS&RDS
director
of
What plans does RCS&RDS have for the Digi 24 TV channel? Our target was not to start a channel that brings profit but to create our own content. RCS&RDS clients are the target audience since the channel is included in the basic package. Digi 24 is financed from the current activities of RCS&RDS. At the moment, we have no advertising so we are not competitors for other TV channels. We do not have plans to launch others for now. Competitors such as UPC also have their own TV channels, available mainly for their own clients, to create customized content. Sometimes they even resell them. We also resell Digi Sport to certain operators. Why did the company decide to establish a presence on the media market as well? We are aligning ourselves with an international trend that has seen cable operators become suppliers of self-made content. Of course, there will also be separate content suppliers at the same time. In the future the content that reaches the viewer will be a mix of these two. The trend among all telecom operators is to offer bundles. Voice will be over the internet, the voice service will no longer exist as such. There will be a flat fee which includes both voice and internet. What will matter will be content. You can resell the content made by others or you can have your own content. Our view is that content carriers like us should be paid a fee for broadcasting content from other suppliers because their service creates supplementary traffic, and network capacity upgrades must be made more often to be able to carry all that content. Will RCS&RDS include smartphones in its mobile range? We have not had smartphones in our range until now but we plan to do that really soon. We are in discussions with various producers such as Huawei, ZTE, Nokia and Samsung. The smartphones will be acquired by clients as part of a post-pay contract which includes data traffic. They can be purchased with a one-off payment or in installments at a very good price, financed by RCS&RDS. Now we only have customer-relations points where clients can come to pay their bills, obtain information on our range and sign contracts. We have only a few outlets that you could call stores. But you will see a change in our business model in this direction as well. otilia.haraga@business-review.ro
Nonresident foreign citizens will be able to buy Romanian farmland from 2014 under Romania’s Treaty of Accession to the EU, and the chances of stopping it from happening are very unlikely, said the agriculture minister, Stelian Fuia, last week, according to Mediafax newswire. The minister said that extending the ban on the purchase of local agricultural land by foreigners beyond 2014 is only workable if the accession treaty is changed, something that is almost impossible to implement.
Ruris ponders Bulgaria expansion Romanian motorized farm equipment producer Ruris hopes to register a sales increase of about 32 percent this year, taking the total to EUR 6.2 million. The growth will come from expanding its product portfolio, new technologies and extending the number of partner stores. This year Ruris will begin exporting to Bulgaria, which the company estimates will account for between 5 and 10 percent of its sales. Future plans include expansion in the entire Eastern Europe region. In 2011 the company saw sales surge 57 percent to EUR 4.7 million.
ENERGY Government sets minimum share price for Transelectrica SPO The secondary public offering (SPO) for a 15 percent stake in majority stateowned Transelectrica, Romania’s grid operator, started last week on the Bucharest Stock Exchange (BSE). The minimum share price for the offer is RON 14.9 and the maximum RON 19.2. Transelectrica’s shares closed at RON 17.06 on Thursday on the BSE, and the current minimum price has been cut by 12.5 percent. The SPO will be completed in 10 days. The offer is split between large investors (90 percent of the shares), for a subscription value which totals or exceeds RON 500,000, and for small investors with a lower value. A consortium made up of BCR (Romania’s largest bank), SSIF Intercapital Invest and Swiss Capital, both brokerages, are intermediating the SPO.
Enel wants to reach 500 MW of local wind power by 2016 Italian utility firm Enel plans to boost renewable investments in Eastern Europe and Latin America through to 2016, as electricity demand in its largest markets, Italy and Spain, has been hampered by the ongoing recession, according to officials. Enel Green Power, the renewable arm of the Italian company, will spend EUR 6.1 billion globally on renewable projects in the next four years, out of which EUR 5.4 billion will be allocated solely to Latin America. Around 4.5 GW
of renewable capacity will be added in this period. Enel plans to reach 500 MW of wind installments in Romania by 2016, on the back of the green certificate program and the strong winds here. Enel Green Power Romania spent EUR 330 million on wind farms last year, taking the installed capacity to 269 MW.
IT iQuest plans 100 headcount hike this year iQuest, a developer of custom-made software solutions and services, forecasts it will end this year with a turnover of just over EUR 19 million, 20 percent up on the previous year. In 2011, it posted a turnover of EUR 16 million. The bulk of revenues, 94 percent, came from the Western European market. The company has several development centers in Romania, in Cluj-Napoca, Brasov and Sibiu (inaugurated in the fall of 2011). iQuest had approximately 400 employees at the end of 2011, having hired 76 people since January 2010. This year, the firm plans to boost its headcount by 100 people.
INVESTMENTS Metair buys car battery manufacturer Rombat Metair Investments, through its whollyowned subsidiary Metair International Holdings Cooperatief UA, has acquired a 99 percent stake in Romanian automotive lead-acid batteries manufacturer Rombat SA for EUR 42.8 million. The transaction is one of the highest ever recorded in the local automotive sector. Metair Investments purchased a 90.05 percent interest in Rombat SA from Trebela Limited, Dorel Goia, Ioan Repede, members of management who are shareholders in Rombat and certain minority shareholders of the firm; and agreed to further purchase a 9.09 percent interest in Rombat from the remaining minority shareholders. PwC Romania and its affiliated law firm in Romania, D&B David & Baias, provided financial, tax and legal advice on the buyer side. Metair was also assisted by the South African law firm Taback.
LEGAL Tuca Zbarcea & Asociatii sets up fiscal consultancy division Romanian law firm Tuca Zbarcea & Asociatii has set up the fiscal consultancy division Tuca Zbarcea & Asociatii Tax. It will operate as an affiliated entity to the law firm. “This step follows the one-stop-shop services policy we have promoted in other areas such as insolvency, intellectual property, structural funds etc,” said associated lawyer Razvan GheorghiuTesta. The new practice will be coordinated by tax partner Alexandru Cristea and Gheorghiu-Testa, who said that the firm expects to generate EUR 500,000-600,000 in the first operational year.
WEEK in numbers
4.37 RON/EUR is the new official exchange rate posted by the Central Bank on March 16. The 0.1 RON increase in the reference rate takes the local currency to a new historic low
MACRO Inflation rate falls to new low of 2.59 percent in February Romania’s annual inflation rate hit a new historic low of 2.59 percent in February, down from 2.72 percent in the previous month, according to the statistics institute INS, below the central bank’s target of 3 percent for this year. “The inflation rate will stabilize at around 2.5 percent in the first half of this year, due to a favorable basis effect, but the second semester will see the annual inflation rate increase to 3.5 percent, due to the risk of increasing prices of raw materials and fuels, and a weaker harvest,” said Melania Hancila, head of the research and strategy department at Volksbank.
State to raise public sector wages in June The ruling coalition has decided to raise the salaries of public sector workers in June. The issue is the first topic on the prime minister’s agenda, and it remains to be seen by how much the salaries will go up, according to Mediafax newswire, quoting the leader of deputies in the Democrat Liberal Party, Mircea Toader. In July 2010, public sector salaries were slashed by 25 percent as part of the government’s austerity measures. Last year, public workers received a 15 percent hike in pay. To have their salaries restored to the previous level, they would have to receive another 16 percent salary boost.
MEDIA Ex Odyssey team starts new agency, Jazz Some of the former employees of Odyssey, the media agency owned by businessman Dinu Patriciu which went bankrupt, have started a new agency called Jazz, according to paginademedia.ro. The agency was founded by Valentin Suciu (former creative director at Odyssey, with a 33 percent stake in Jazz), Irina Pencea (previously executive director, with a 40 percent stake) and Diana Benko (ex BTL director, with 27 percent). The Jazz team comprises 15 people working on ATL, BTL and client service, according to the same source.
www.business-review.ro Business Review | March 18 - 25, 2012
4 NEWS HEALTHCARE PARTNER CONTENT
Medicover predicts new hospital to make EUR 4 mln in revenue
4 important factors that may define your success while investing in Romanian renewable energy Despite the grow- You will worry during the next 10 – 15 ing interest for years, when you will realize that a investments in wrong angle can lower your producthe Romanian re- tion, or other minor details may cause newable energy 10 – 20% less income for your investsector, we have to ment. admit that the market is still on There are many serious companies in its first steps, es- Romania, but there are also several pecially in the “not appropriate” ones. The choice is p h o t o v o l t a i c , yours. Ilias Papageorgiadis hydro and biomass sectors. 3. The quality of materials The wind segment is a bit more devel- You don’t need to be a top expert in oped, due to some major projects that technical issues to guess that this is will be delivered this year, but it’s still important. People usually say that the far from being considered a mature choice is between “Europe and China”. market. Right now we are just at the Others, with more years of experience first chapter of the book titled “Ro- rephrase the dilemma as “Materials manian renewable energy invest- with track record and guarantees or ments”. This is why we notice many no name ones”. people talking, but very few projects constructed and connected to the grid. Let us also not forget that most Europeans produce in China as well nowaDuring this first period most people days. focus on the project itself and its documentation. This is the correct ap- Prices decrease month by month. But proach, but this is not enough. The since green energy is a long term incumulative experience from other ad- vestment by default, it’s not certain vanced markets proved that this is just that the cheapest solution is always the beginning. There are also many the safest. other factors that can define the success of your investment. Let us ex4. Insurance, insurance, insurance plore 4 of them: It takes some time to find the right people with experience and products 1. The connection and evacuation for insuring renewable energy investcost ments. In Greece people calculate the value of a project for sale including the cost of First of all, make sure that you have connection to the grid and the evacu- calculated the cost in your annual exation of electricity produced. This is penses, many investors forget this asnot by coincidence. Many times this pect. cost can considerably increase the total budget or may exceed the If you check more carefully, you will price of buying the fully permitted see that the quality of the contract you project. sign is defined through many details. There are excellent projects which are unsold due to this problem, but also very good ones which were sold at a more expensive price, as the connection costs were really low. You should better calculate the total sum, it prevents surprises in your budget and cash flow.
P
rivate health services provider Medicover officially opened its first local hospital last week following an investment of approximately EUR 20 million. The 7,000-sqm facility has a capacity of 122 beds. Medicover Hospital has been operational since January 26 and in its first month of activity it treated 1,500 patients and reported EUR 100,000 in revenue. In the first year of activity the company estimates that the hospital will generate EUR 4 million in revenue. Present at the opening event, Jonas af Jochnick, main shareholder and president of Medicover as well as founder of cosmetics company Oriflame and of Oresa Ventures, said that for now the firm does not intend to invest in a second hos-
FMCG
Olympus Romania borrows EUR 30 million from BSTDB
Mustafa Boran, vice president BSTDB, and Dimitrios Sarantis, chairman of Olympus, after signing the loan agreement
Right now we are waiting for new insurance products to appear on the Romanian market. This is a field that is worth your time and attention.
G
English say: “You pay peanuts, you get monkeys”. And green energy is not “monkey business”. It needs time, expertise and careful moves. What is your opinion?
Ilias Papageorgiadis CEO More Real Estate Services www.more-group.eu
ADVERTORIAL
2. The EPC company “Everyone who constructs” is not necessary someone suitable to construct your project. Many people will tell you that “it’s a simple job, you need not worry”. Correct. You will not worry now.
Jonas af Jochnick, main shareholder and president of Medicover
pital, but as demand will go up in the years to come, the company will continue to expand locally. “Today we don’t have plans to open a new hospital but we know we want to stay here for many years,” he said, adding that for the time being the company wants “to be sure it understands what running a hospital in Romania means. (…) We have the land and we are ready for a new hospital but we don’t know when this will happen.” The private health services provider could eventually open its second hospital on a plot of land in the Pipera area, which was bought in 2010. Swedish firm Medicover has been present in Romania for 15 years. In addition to the recently opened hospital, it runs a network of 11 private clinics in Bucharest, Cluj, Constanta, Iasi, Timisoara, Ploiesti and Brasov. It also owns the Synevo medical laboratories. In Romania Medicover has 100,000 patients. The private health services provider also has operations in Poland, Hungary, the Czech Republic, Slovakia, Germany and Ukraine. Medicover Hospital employs 100 doctors and features a surgical center, two delivery rooms, two intensive care units, one of which is for newborns, a pediatrics department, 25 offices for various medical specialties and a medical imaging department. The hospital is located in the Aviatiei neighborhood, at 8 Pechea Street. ∫ Simona Bazavan
reek dairy producer Olympus estimates that the turnover of its local division will almost double this year to EUR 40 million, with most of the growth coming from exports. Last year the figure amounted to EUR 23 million, out of which EUR 20 million came from external markets. The same trend will be maintained over the coming years when the dairy producer estimates that 80 percent of its production will be exported. So far, Olympus products that are made in Romania are sold in Eastern European countries but the company’s target is to reach Western European markets and the US in future years. Olympus announced last week that it had obtained a EUR 30 million loan from
the Black Sea Trade and Development Bank (BSTDB) which will be available over the next seven years. The money will be mainly used to increase the production capacity of the company’s dairy factory in Halchiu, Brasov county. This will enable the company to increase its exports, said Dimitrios Sarantis, chairman of Olympus. The factory in Halchiu was opened last year following a EUR 55 million investment from the company’s own funds. It covers 25,000 sqm and at full capacity can process 40,000 liters of milk per hour and produce up to 120 tons of yogurt, 100 tons of white cheese and 16,000 liters of PET milk per day. Production started last June and currently the factory is working at 25 percent capacity. By year end this should increase to about 50 to 60 percent. Part of the Tyras group of companies, Olympus was set up in Greece in 1965 as a family business and is now on its third generation The Greek producer has been present in Romania since 1999 when it bought a dairy factory in Baraolt, Covasna county, which, following the opening of the new unit, has now been closed. The company also owns a 23 percent stake in local dairy firm Prodlacta and acquired local cosmetics producer Elmiplant in 2007. ∫ Simona Bazavan
www.business-review.ro Business Review | March 18 - 25, 2012
NEWS 5
METALS
Gold demand inches up 0.4 percent after variable 2011
Dragos Tanase, GM of RMCG
A
recent report on the gold market by industry association the World Gold Council (WGC) found 2011 was “a year in two halves”, with “divergent paths for Indian and Chinese demand; growing mine production and falling recycled gold supply; strong central bank net buying, yet the resumption
of producer hedging as a small source of supply.” According to the study, annual gold demand for 2011 totaled 4,067.1 tonnes (+0.4% year-on-year increase), worth an estimated USD 205.5 billion. “Gold continued its 11-year bull run,” said the WGC report, with demand for gold bars and coins accelerated, while both jewellery and technology sectors remained resilient. In Europe, gold demand “registered its seventh consecutive annual gain, surging to a staggering 374.8 tonnes in 2011, a new record high. “When looking at these figures, we mustn’t think they don’t have an impact on Romania,” said Dragos Tanase, general manager of Rosia Montana Gold Corporation. “Our country is one of the contributors to this increased demand, as partially showed in the analysis. The ‘Other Europe’ category of demand, which includes Romania, is now at 90.8 tonnes for 2011, accounting for a considerable proportion of investment in the region.” According to Tanase the big opportunity for Romania is in the gold supply segment, which was 40 percent weaker in 2011 than in 2010. “Our country has the chance to become the biggest gold producer in the European Union, taking full advantage of the way the gold market had been reshaped in the past years, he said. ∫ Staff
BUSINESS AGENDA March 20 11:00 Adrem Invest organizes a press conference to mark the launch of its CSR initiative at bookshop Bastilia. By invitation only. March 21 19:00 Wu Xing organizes an event to mark the launch of a new restaurant in Bucharest's historic center. By invitation only. March 29 08:30 BR organizes Tax, Law & Lobby, an event that addresses the latest legal and financial provisions that impact the business environment, at Willbrook Platinum. By invitation only. More at http://business-review.ro/br-events. March 29 14:00 BR organizes a workshop on access to finance that includes legal and practical aspects for Public Private Partnerships, EU Funds and State Aid, at Willbrook Platinum. By invitation only. March 29 – April 1 Construct Expo, an international fair for construction technologies, equipment
and materials, is organized at Romexpo Exhibition Center. March 29 - April 1 Ambient Expo, an international fair for interior and exterior design, decorations and furniture, is organized at Romexpo Exhibition Center. March 29 - April 1 Antique Market, a fair for art objects and antiques, ranging from pieces of furniture to old jewelry, is organized at Romexpo Exhibition Center. March 29 - April 1 Expo Flowers & Garden, the international exhibition for the flower business, landscape design, horticulture and design, is organized at Romexpo Exhibition Center. March 22 11:00 Coltuc law firm organizes a press conference on lawsuits against banks at the Bucharest Unirii Square Hotel. By invitation only. 19:00 Amb Wine Company organizes an event to mark the launch of a premium wine brand at Pipera Business Tower. By invitation only.
www.business-review.ro Business Review | March 18 - 25, 2012
6 INTERVIEW
Opportunity knocks for nimble NEPI South African fund NEPI had 26 income-producing properties and two developments in Romania by the end of 2011. Its portfolio value has almost tripled from EUR 146 million in 2009 to an estimated EUR 341 million in 2011. With no budget limit, CEO Martin Slabbert and his team remain on the lookout for opportunities, he tells BR. ∫ ANDREEA CEASAR
How does the local real estate market compare with others in CEE? The whole region is a bit slow at the moment, while Poland is the only market which is attractive – not for us, though, as it is very crowded and as things stand now I can say we would never touch it. Romania has done much better than was expected in 2011 as the public finances are under control. I believe that there is a great future for this country, but I am probably in the small minority that thinks as so. Romania has a lot to offer, which is why we are doing the things we are doing. We really believe in this country.
Do you expect to exceed Immofinanz’s portfolio, estimated at over EUR 900 million, in three years? We have maintained an active position for quite some time now, more than two years. But our target is about profit; size is irrelevant. We are growing our business opportunistically. The only thing we are interested in is the return of equity. Do you have an annual investment budget? If a company like us has a budget it is probably doing very poorly. We don’t do business based on a budget and we never will. Acquiring projects is an ongoing process; sometimes we see potential in something people have done and sometimes it is just an opportunistic acquisition and someone wants to dispose of something.
Have desperate developers come to you to sell their projects? People come all the time, but, as usual, we don’t buy anything that we see on the market or that comes to us. What are your development plans for 2012? We have plans but as they change all the time we are not going to talk about them until the right moment. What is known is that we will be completing the development in Ploiesti this year, and two further acquisitions are on the verge of being finished: the City Business Center in Timisoara and Mobexpert retail box in Brasov. Those are our immediate plans. We are active and we are looking for expansion opportunities in Romania and elsewhere. NEPI’s main target is to develop a large retail portfolio in Romania and elsewhere, and we could do some transactions outside Romania soon. There is also the issue of office space, but in the end we will probably have 80 percent retail assets. There is a trend of obtaining green building certificates for existing and future properties, as owners believe that this is a solution
Photo: Mihai Constantineanu
What are the main criteria for selecting assets? Are you interested in the developer’s reputation, in terms of quality of construction and so on? The sustainability of the project and its growth potential. We are developers ourselves and you will probably see more developments from us in the future. It is part of what we do. We look for the potential in a project, improve it and make a profit. We had some products that we knew had quality problems – in terms of design, not necessarily regarding the quality of construction itself – which we fixed. From the beginning we knew that they were far from ideal, but we had a basis with which we considered we could work and generate a dominant asset in the region. For example, in Pitesti we bought an under-performing project, which was in fact very ugly and poor, which we redeveloped and opened in December 2011. We think we did a good job.
What is the key to a successful business? I believe you have to understand the environment and adjust very quickly when it changes, and then you will have success. That is all. This is what we have done in these two years, we have adapted to the market.
CV Martin Slabbert October 2007 – present CEO of NEPI July 2005 – December 2006 Partner at Deloitte Central Europe April 2004 – May 2005 CFO at Premier Foods Limited May 2000 – April 2004 GM, Capital Management at Nedbank.
for gaining clients or tenants. How do you feel about this? I think it is very naive. If you have to choose between building a green roof because it is green and building it because it is good for the building itself, you should go for the latter. I personally understand the need for cost reduction and efficiency strategies, but I don’t think green certificates will change anything. You should invest in cost efficiency regardless of whether you want a green certificate or not. We are interested in anything that will reduce running costs. If we can do something about it we will. Has NEPI had any failures in these two years? We could have had many potential failures if we hadn’t adapted fast. But the company and employees understood the importance of acting when everything was down. We had projects without tenants and we could have cried about this, but we didn’t. Instead, we looked for solutions and the asset turned out to be one of NEPI’s most important five assets. In the current cycle we are just accumulating properties.
Do you have any plans to acquire a facility management company? We manage all our projects internally, as we have found out that we manage the properties better than if they are outsourced. If we are all in the same boat and have the same objective, the quality of service gets better. When the time comes we will employ more people. Outsourcing has to be done for the right reasons. You have EUR 156 million of interest-bearing borrowings on the long term. A normal citizen would ask you in how many years you intend to return this debt? This question presupposes that it has to be returned, which is a little naive. We are a property company and if you look at property companies across Europe you will see that they have a lot of debt compared with their assets. We are talking about an average of 50-60 per cent. Our own is approximately half of this value, which is in fact very low. I don’t believe we will repay all these funds. We will probably refinance some of our investments and will constantly have some portion of debt in our balance sheet. You in fact share risk with the banks. This is normal in any period. How have things worked out in the first year of listing on the Bucharest Stock Exchange? Today the local stock exchange is undeveloped, but it can develop in time. In many, many years. So you didn’t have great expectations? We didn’t have any expectations and we will not have. The listing wasn’t done to raise funds, even if we had some trades at the end of last year. Attracting investors doesn’t happen overnight.
What is the local style of doing business? I have an exceptionally hardworking Romanian team with 50 employees. But Romanians are humans: some are trustworthy and honest, while others are dishonest and cheat you, as in any other country. What I can say is that Romanians are more skeptical than any other businesspeople and it takes a little more to convince them. Maybe this is because of the negative past examples.
andreea.ceasar@business-review.ro
NEPI’s ongoing activity from 2011 l Victoria City Center, Bucharest: With
Benevo Capital and CD Capital, the fund formed a joint venture for the development of a 56,000-sqm shopping center, but at the beginning of March 2012 this investment was still subject to discussion by the group and the joint venture partners. lVictoriei Office, Bucharest: Started the design and permitting phase for an Aclass office building on a 4,400-sqm piece of land on which there is a historic villa in Piata Victoriei. lBrasov buy and leaseback: The group is currently completing due diligence on a buy and leaseback transaction with Mobexpert. The space in question is located near Brasov Strip Mall, which NEPI redeveloped and opened last year. lCity Business Center, Timisoara: In January 2012, the group acquired 47,000 sqm of A-class office space in Timisoara, which currently comprises three buildings with a GLA of 27,000 sqm. lPloiesti Shopping City, Ploiesti: The fund acquired land adjacent to Carrefour’s operating hypermarket and reached agreement with the retailer to redevelop the combined properties into a regional shopping center.
www.business-review.ro Business Review | March 18 - 25, 2012
8 MONEY
Banks cultivate financial products for farmers Many lenders active on the local market have decided to concentrate their efforts on credits for agriculture in the last few years. Specialists told Business Review why banks are sowing these seeds and predict the future crop of bank products for farmers and agricultural companies. ∫ ANDA SEBESI Although it has been declining for the past twenty years, Romanian agriculture makes up a greater percentage of local GDP than in other countries in Central and Eastern Europe and the Euro Zone – about 7 percent in Romania versus 4 percent in Poland and Hungary and 2 percent in France – according to a study conducted by BCR in July last year. The same study found that agriculture had made only a small contribution to Romania’s economic growth in the past ten years compared with its weight in the GDP, mainly because of its significant dependence on the weather and the poor state of much farming equipment, which is low-tech and outdated. Moreover, 53 percent of the arable area in Romania is cultivated by small farms of less than 10 hectares that usually are poorly equipped, while the biggest 50 farms in Romania account for less than 5 percent of the total arable area. In addition, more than 71 percent of the total used area is cultivated at low intensity, with farms spending less than EUR 125 on each hectare, compared with EUR 336 per hectare spent on fertilizers and pesticides in France. In such a context, why have lenders been focusing on agriculture for the last few years? “Banks were impressed by the results posted at macroeconomic level in agriculture and the significant European funds that can be attracted for projects developed in this sector,” says Dragos Cabat, partner at eFin.ro. Agriculture also became a target due to the good results that some – albeit a minority of – Romanian companies have enjoyed in recent years. “The reality is that only a small percentage of companies – the large and well structured ones – have managed to notch up notable performances in that period. The other small companies active in agriculture remained at the edge of profitability,” adds Cabat. Pundits believe that Romania has great potential for development in the agricultural field, as it ranks fifth in the EU 27 for arable area, found the BCR study. And this potential has been spotted by both banks and other financial investors. Moreover, the researchers found that Romania was among the top ten corn producers worldwide in 2010, with a production of over 9 million of tons in a year characterized by favorable weather conditions. Last but not least, Romania could double its agricultural production and triple its exports if it matched Euro zone levels of productivity, and could meet
Come grain or shine: farming is proving fertile territory for lenders, despite the sector’s dependence on good weather
consumption requirements for about four Romania countries, says the study. “According to the latest sector analysis, agriculture is one of the fields recommended to invest in. This is why lenders and other financing institutions are attracted to this sector,” says Remus Nica, manager of credit products at Intesa Sanpaolo Bank. On top of that, significant European and national funds have been allotted to agriculture, which benefits from subsidies that will increase in value in the coming years and guarantees from funds and state institutions specialized in this sector. “These factors are an additional guarantee and diminish the risk of investments. All of these are arguments that boost interest in agriculture and investments in this field,” says Nica.
Dan Petre, commercial respondent for the agricultural market commercial pole network at BRD-Groupe Societe Generale, says that there are two different explanations for why lenders are focusing on agricultural credits at present. “We have seen the constant development of this sector in the last few years, in terms of total production, efficiency of activity and the potential that is still underexploited,” says Petre. At the same time, he adds that lenders have understood that they need to pay attention to a sector that has been neglected so far compared with traditional areas for financing like commerce, services and transportation.
Fields of gold? 2011 was a reference year for this field and demonstrated that a good agricul-
tural year can mean a higher GDP and a lower inflation rate for the local economy. Laszlo Diosi, CEO at OTP Bank Romania, thinks that the country should become a huge agricultural exporter, but in order to achieve this goal its needs a concrete government program and a lot of development in its basic activities and processing industry. But how do lenders see agriculture? “It is a strategic field that has been of great importance to BRD for more than five years,” says Petre. The bank has developed a wide range of dedicated products for agriculture that illustrate its trust in this field of activity. “Despite this, we believe that there are still many things to do in rural areas, where access to bank products can increase significantly both in terms of financing and current operations,” he says. Elsewhere, Intesa Sanpaolo Bank has
www.business-review.ro Business Review | March 18 - 25, 2012
Romanian agriculture facts and figures l Romania ranks fifth in the EU 27 for arable area l More than 71 percent of the total used area is cultivated at low intensity, with farms spending less than EUR 125 on each hectare in Romania l 53 percent of the arable area in Romania is cultivated by small farms of less than 10 hectares that are usually poorly equipped l The biggest 50 farms in Romania account for less than 5 percent of the total arable area.
Source: BCR study accumulated significant experience in this field, and the lender has included in its portfolio a dedicated product range for farmers and companies conducting agricultural activities for the last few years. The bank has significantly improved its offer lately, says Nica. “In addition to our financing solutions, our agricultural customers can benefit from the entire range of general products and services, like current accounts, savings instruments, internet banking and cash management. All of these prove that we are interested and actively involved to a larger extent in supporting agriculture,” says the representative of Intesa Sanpaolo Bank.
FOCUS 9 Lenders reap positive results from agriculture Since 2009, when Intesa started to seriously finance agricultural companies, the volume of agricultural loans granted has increased each year. “We estimate that the trend will grow in the coming years, both because of increased demand, a diversified range of dedicated products and because Intesa Sanpaolo Bank became known among farmers as an open and fair partner,” says Nica. Meanwhile, OTP Bank has seen a gradual but steady increase in this sector of activity in recent years. “So far we have had a traditional agricultural portfolio mainly involving processing companies,” says Diosi. The strategy of BRD-Groupe Societe Generale for this sector was to create and implement new types of financing every year in order to support those companies that have agriculture as their main activity, regardless of their organizational form: companies, authorized individuals (PFA) or lone agricultural producers. “At present, BRD covers both the needs for working capital and investment projects developed by farmers through a wide range of financing products,” says Petre. He adds that loans for working capital based on subsidies have posted good results in the last three years. The lender also has a loan for agricultural campaigns in its portfolio which offers several advantages, such as the range of expenses that can be covered by it, in addition to the level of financing – up to 80 percent of expenses from the agricultural campaign – a grace period of ten months
for the principal and six months for the interest, adapted to the specifics of crops. As for investment loans, customers can access credit of up to 75 percent of the total value of the investment project for up to ten years, with a grace period of up to nine months based on the seasonal production cycles. “Our focus on the needs of farmers took BRD’s total exposure to eight percent of credits given to the agriculture and food industry,” says the representative of BRD. In addition, the bank created EUROBRD, a special program for borrowers who need loans for projects with a European funds component.
Harvesting future development Specialists believe credits for agriculture can post significant increases in the coming period because it is still an under-financed field. Moreover, agriculture was considered to represent a maximum risk for a long time and so there were no financing lines dedicated to it. “The direction will be upwards, and this increase will be more visible as we assist with the pooling of subsistence farms into larger companies in the years to come, with more resources and opportunities to attract funds,” says Nica of Intesa. Specialists say that after a long period when agriculture was not appealing to lenders their interest in agriculture is expected to increase significantly is the next few years. “However, a bad agricultural year could lead to adverse reac-
tions from lenders so there is a 50 percent chance of agricultural loans growing rapidly. The amount of loans could double in the next two years. Unfortunately, only large agricultural companies will have access to credit in the coming years,” says Cabat. He adds that agriculture has a higher potential for growth than many other industries where Romania is not competitive. “Plus, it benefits both from the domestic market and the potential for exports to the EU zone,” he says. Elsewhere, Diosi of OTP thinks that loans and EU funds are the two factors that will develop agriculture in the next few years. “If they boom in the coming period I predict a double-digit growth for the agricultural sector,” says Diosi. And Petre from BRD believes that financing investments will be the main axis for growth, especially because agriculture needs to modernize and improve the technology of its agricultural equipment and material basis. According to the BCR study, nominal prices for wheat could grow by more than the historical average by 2020 while those for corn could also outdo the historical average. Weather conditions and climate change, the level of inventories, energy prices, the exchange rate, demand, commercial restrictions and potential wars will remain the main factors that will determine the volatility of prices at international level, says the same study.
anda.sebesi@business-review.ro
www.business-review.ro Business Review | March 18 - 25, 2012
10 LINKS
Dramatic license: state and operators clash over spectrum auction The telecom market erupted last week as the preliminary information on the much trumpeted hundred-million-euro auction of telecom licenses was announced. The stakes are huge since the event could reshape the market and decide the allocation of spectrum for the next 15 years. State officials and industry leaders did not see eye to eye on the length of licenses, starting prices or how the event should push the industry forward. ∫ OTILIA HARAGA
JEAN-FRANCOIS FALLACHER, CEO ORANGE ROMANIA “ARPU in Romania is one of the lowest in Europe. It was more expensive to buy a coffee and a croissant than a prepay card.”
INAKI BERROETA, CEO VODAFONE ROMANIA “I nearly had a heart attack at the end of last year: there were three days left and we did not have a license.”
STEFANOS THEOCHAROPOULOS, CEO COSMOTE ROMANIA “The Romanian government needs to be realistic about the fees the operators can pay in this business environment.”
STARTING PRICES Licenses allocated for 15 years (20142029) EUR 35 million per block of spectrum in 800 MHz EUR 40 million per block of spectrum in 900 MHz EUR 10 million per block of spectrum in 1800 MHz EUR 4 million per duplex block of spectrum in 2600 MHz EUR 3 million per simplex block of spectrum in 2600 MHz Licenses allocated for 15 months EUR 3.4 million per block of spectrum in 900 MHz EUR 800,000 per block of spectrum in 1800 MHz
* Starting prices proposed by ANCOM must be approved by government decision up in the right hands. It should not be to create artificial competition among the operators to maximize government revenues,” said Richard Feasey, director of public policy at Vodafone Group. Telecom player RCS&RDS has already made public its position on the charges proposed by ANCOM. “The starting prices are too high. ANCOM should encourage
Courtesy of RCS&RDS
fanos Theocharopoulos, CEO of Cosmote Romania. At the end of last year, the ARPU on the local market was EUR 6.9. By comparison, in the Czech Republic it was EUR 18 and in the UK EUR 47. “This is how far we have to go to catch up to other countries in Western Europe, while investments in infrastructure are comparable. Romanians want premium quality at minimum prices,” said Rada. However, the authorities added that a decline in the ARPU is not unusual, given that the market is coming to maturity. “We do not like statements such as: let us end this price war because prices are too low. There is no such thing as low prices from our point of view,” said Mircea. The issue of what price the operators should pay for the spectrum was another thorny topic. “The state wants fierce competition during this auction, in order to push up the price of the acquisition. We want to bring as much money to the state budget as possible,” said Marius Fecioru, state secretary in the Ministry of Communications. But industry leaders warned that high license costs could prove to be an impediment to investing in future technologies. Insiders warned the state not to focus solely on price. “By and large, in the first 15 years we have not used spectrum to generate revenue for governments. The intention should be that the spectrum ends
Photo: Laurentiu Obae
Courtesy of Vodafone
Courtesy of Orange
“After 15 years, it is time to reconfigure access to the spectrum for at least the next 15 years. The mobile communications sector needs more and more of it. This year represents a historic opportunity for longterm access to spectrum in Romania,” said Catalin Marinescu, president of telecom authority ANCOM. Up for grabs is spectrum in the bandwidth 800 MHz, 900 MHz, 1800 MHz and 2600 MHz, which will be allocated until 2029. “If all the spectrum put up for auction is sold, the Romanian state could cash in EUR 700 million,” said Marinescu. The winners should pay for the licenses by July 2013. Payment can no longer be made in installments. The auction was conceived to allow at least four companies to provide mobile communication services by 2029. State representatives said they had learned from the example of other European states and were prepared for everything, including the possibility that one of the current operators could lose its license. Discussions that took place last week between state officials and leaders of the telecom companies generated some differences of opinion. A KPMG report presented by Mihai Rada, director for technology, media and telecommunications, found that telecom companies’ direct contribution to the Romanian economy totaled more than EUR 1.6 billion. The report took into consideration telecom players Orange Romania, Vodafone Romania, Cosmote Romania, Telemobil (taken over by Cosmote) and RCS&RDS, reporting that their cumulated turnover represented 3 percent of Romania’s GDP last year. “In Central and Eastern Europe, Romania has the highest number of mobile operators,” said Rada. However, state representatives objected to this view. “Let us not forget that Telemobil is in the same group as Cosmote. So it could be said that there are only three and a half players on the market,” said Valentin Mircea, vice-president of the Competition Council. “Competition on the Romanian market is starting to soften. 2012 should bring a re-launch of the market to see which players will fight to provide better services at lower prices,” added Mircea. Industry leaders repeatedly stressed that Romania is one of the countries with the lowest ARPU (average revenue per user) in Europe and the industry direly needs long-term predictability. “The margins we are making are much lower compared to other countries. We need a certain time span to obtain a return on investment. Mobile telephony requires a very high investment upfront,” said Ste-
VALENTIN POPOVICIU, BUSINESS DEVELOPMENT DIRECTOR RCS&RDS “Starting prices are too high. ANCOM should encourage competition and take prices to a lower level. Also, license fees should be paid in installments.”
www.business-review.ro Business Review | March 18 - 25, 2012
competition and leave prices at a lower level,” said Valentin Popoviciu, business development director at RCS&RDS, who added, “Licenses should be paid for in installments.” Sources on the telecom market say the final acquisition price will depend on the degree of involvement of RCS&RDS, which is an important player with operations in Romania, Hungary, the Czech Republic, Slovakia, Croatia, Serbia, Spain and Italy, in the auction. And RCS&RDS has already announced it is very interested. The operator said it would pay special attention to spectrum in the lower bandwidth of 800 MHz and 900 MHz. However, it is taking into consideration the other frequencies as well. “All the packages in the auction are attractive. We will certainly want to acquire licenses for the lower frequencies of 800 MHz and 900
CALENDAR March 14, 2012 – documents published for public consultation April 17, 2012 – deadline for observations April 30, 2012 – deadline for the modification of documents Yet to be set – adoption of gvt. emergency ordinance on freeing up spectrum in 830-862 MHz, 1747.5-1785 MHz, 1842.5-1880 MHz, 2500-2690 MHz Yet to be set – gvt. adoption of decision regarding starting price of license taxes May 1, 2012 – official publication of final version of auction documents
LINKS 11 ascending price auction favors the operaMHz. We will probably also bid also for othtors already present on the market. “If er licenses in the 1,800 MHz and 2,600 MHz the goal is to create a more competitionranges. Our goal is to supply 4G services to driven climate, the solution could be a deour clients,” said Popoviciu. scending price auction,” Mircea suggested. RCS&RDS has complained that it is not But industry pundits think 15 years is being allowed to compete on an equal the minimum term that can be stipulated footing with other companies since it does not have access to the 900 MHz frequency. for the allocation of the spectrum. “Just imagine how the industry would have Furthermore, the company has been worked if the licenses had been given for seeking compensation since 2009 for not being granted radio spectrum in 900 MHz, two years,” said Feasey. “The best solution would have been to give operators suffilike its competitors Orange, Vodafone and cient time but the next most important obCosmote. jective is to create the possibility to retain “The European Commission decided the spectrum they already have.” that, if there are countries where some op“The period I worry about is the next erators do not have spectrum in 900 MHz, couple of years, because if we get that short then they should be compensated. ANCOM period wrong, this would be the third year is saying that the compensation measure is in a row that the European mobile industhe auction, but we do not believe this to try contracts. How we manage this transibe so,” said Popoviciu. tion period between the last 15 years and He gave the example of France, where the next 15 years is then key point,” he contelecom operator Iliad received spectrum cluded. in the 900 MHz frequency, after the allocation was revised and some was taken from other operators. OPERATORS’ INVESTMENTS According to Popoviciu, Ovum conOrange Romania has invested in excess of ducted a survey for ANCOM that found that EUR 2 billion in Romania. “Telecom operRCS&RDS was at a disadvantage, but the ators can hardly delocalize. We are investcompensation failed to arrive. “We have lost ing heavily and we will not close our facEUR 350 million, being denied access to the tory,” said CEO Jean Francois-Fallacher. 900 MHz bandwidth,” he said. “There are 2,500 employees working for OrDisagreements between the state and ange. 300 of our employees from Cluj, telecom industry also arose in relation to Timisoara and Bucharest are working for the length of time for which the spectrum other Orange branches abroad. Orange should be allocated. paid RON 800 million in tax last year,” said The Competition Council questioned Fallacher. whether 15 years was not too long a duraVodafone Romania has invested EUR tion for the licenses. “A shorter time span 2.8 billion in Romania. “At Vodafone, we would be welcome because then the comemploy 4,000 people,” said CEO Inaki petition could be re-launched,” recomBerroeta. Over the past five years, Vodafone mended Mircea. Moreover, he said that an and its employees paid EUR 1.2 billion to the
SPECTRUM ON SALE * Granted for 15 years, starting April 6, 2014 42 duplex blocks of 5 MHz each: 6 blocks in 800 MHz 7 blocks in the 900 MHz 15 blocks in 1800 MHz 14 blocks in 2600 MHz 3 simplex blocks of 15 MHz each in 2600 MHz *Granted for 15 months, expire on April 5, 2014 5 duplex blocks in 900 MHz 6 duplex blocks in 1800 MHz state budget. Of this sum, EUR 920 million were taxes on profit and dividends and EUR 105 million were license and regulation taxes. Vodafone employees contributed EUR 135 million. Cosmote Romania, the third largest player on the mobile market, has 2,400 employees. “If we also include Romtelecom, we provide employment for around 10,000 people. The investment made in Romania by OTE has so far amounted to EUR 3 billion,” said CEO Stefanos Theocharopoulos. RCS&RDS had invested approximately USD 1 billion in the development of the company’s network by 2010. Estimations on the market put RCS&RDS’s business at USD 800 million. According to Popoviciu, the company’s ARPU is a little below the market average.
otilia.haraga@business-review.ro
www.business-review.ro Business Review | March 18 - 25, 2012
12 POWER
Green energy grapples with financing challenge Romania is an emerging market for renewable projects and the green certificate support scheme has boosted investments in the field, making lenders more interested in these projects. However, an unstable legal framework and the lack of investment in the grid could hinder the burgeoning green market, specialists warned.
A heavy blow: legal and financing issues could impede the green energy market
∫ OVIDIU POSIRCA
Green energy seeks green light for financing
Romania ranks 13th in the Country AtGhelasi says the renewable energy sector tractiveness Index drawn up by consulis capital intensive and that projects are tancy firm Ernst & Young (E&Y) this Febnot feasible by themselves but need a ruary. Moreover, the country comes support scheme that promotes energy tenth in the wind segment, alongside output from clean sources. Poland and Ireland. E&Y said Romania “The more a renewable sector is dependmade the top ten destinations for wind ent on the support scheme, the more the projects after Monsson Group started financing risk increases,” says Ghelasi. constructing a 150 MW park worth EUR Cosmin Stavaru, partner at law firm Bul245 million. Luigi Ferraris, chief financial boaca & Asociatii, says the enforcement officer of Enel, the Italian utility firm, anof the secondary legislation to Law nounced last week that the company 220/2008, which promotes energy prowould double its wind capacities in Roduction from green sources, has immania to 500 MW by 2016. Its renewable proved the premises for financing rearm, Enel Green Power, spent EUR 330 newable projects. million on wind farms last year, taking “The current law grants the incenthe installed capacity to 269 MW. tives for a guaranteed 15-year term, thus Iulian Circiumaru, manager of manallowing for long term cash-flow projecagement consultancy services at PwC, tions and a business plan, which constisays another 900 MW in wind power will tute the very foundation on which the be rolled out this year. Around 1300 MW project financing is to be built. Also, the of new wind installments will become price of green certificates even at the operational through to 2015 according to floor level set by the law appears to be announced projects. still sufficiently rewarding for investors; Meanwhile, Robert Ghelasi, director hence, the credit standing of a project is of the energy department at Capital Partimproved,” says Stavaru. ners, an investment bank advisory, says The prices of green certificates (GC) Translectrica, the grid operator, can take have a minimum limit of EUR 27 per GC in a maximum of 3000 MW from rein order to protect producers, while the newable sources in the system. ceiling is EUR 55 per GC to protect conRomania had 976 MW in wind casumers. Around 1.7 million GCs were ispacities, 1.9 MW in photovoltaic (PV) sued in 2011, out of which over 1.4 milenergy, 382 MW in small hydro plants lion were traded, either through bilaterand 25 MW in biomass in January, acal contracts, which was the preferred cording to grid operator Transelectrica. channel, or on the GC market.
www.business-review.ro Business Review | March 18 - 25, 2012
“The support scheme in Romania, ownership or usage rights. Admittedly, this can be challenging in remote areas which is based on the green certificate where a lot of people treat their ownerscheme, is one of the most advantaship rights quite informally. For a develgeous in Europe,” says Circiumaru of oper, that means having to deal with land PwC. He adds that solar power is grantthat is not yet registered in the Land Book, ed six GC for every generated MW, bionot yet measured by a cadastral expert mass three, wind two, while small-hydro and often not even legally inherited due has been allotted one or two. to failure to take the necessary steps,” Perry Zizzi, partner at law firm Clifsays Zizzi of Clifford Chance Badea. Howford Chance Badea, says the incentive ever, almost all banks and future purscheme was necessary in order to make chasers seek developers that have serenewable projects bankable. cured the rights to construct and operate “The most conservative methodology these projects. is to attribute the minimum value to a “We are in a good period as banks are green certificate, although some banks getting more interested in financing rehave voiced concerns about a developer newable projects,” says Corneliu Bodea, not being able to sell its green certificates vice-president at Adrem Invest, a comat all,” says Zizzi. He adds that by the bepany that will spend EUR 70 million on ginning of next year the level of incena cogeneration plant in Suceava city, futivisation for certain technology might be reduced if overcompensation is identified, eled by biomass. However, 80 percent of the funding will come from banks. Bodea but there are ongoing efforts to grant says banks have become “friendlier” wind output three GCs. since the authorities concluded their “There is financing appetite from local banks for projects between 5 and 10 MW, negotiations with the EU and the last updates to the renewable law that regulates but financing for large projects is prothe GC grant system. vided through syndicated loans or club deals where the lead arranger is an international financial institution such as Green uncertainties the EBRD or EIB,” says Ghelasi. Although some banks are starting to The Capital Partners director says lend an ear to renewable projects, the the green certificate scheme has signifigreen certificate program that acts as a cantly improved project financing as the guarantee raises bankability issues. required equity has decreased from 35- “Many bankers seem to consider the 40 percent to 25 percent, as the level of green certificate system as having a regranted CGs has increased. Previously duced degree of bankability due to its there was no financing for PV projects as rather artificial nature, combining mar85 percent of the revenue originated ket-based characteristics with regulated from GCs. market features,” says Stavaru. He adds the validity period of GCs has been reHurdles for renewable duced to 16 months and there is no guarprojects antee of the off-take of green certifiSpecialists say bureaucratic procecates when the supply from current redures and frequent changes in legislation newable generation exceeds demand are keeping some investors away which for the mandatory green certificate acimpacts financing. Transelectrica says quisition quota. The floor price of EUR 27 around EUR 500 million is needed to upfor a GC is guaranteed in theory only, as grade the grid in the coming years, but it may not apply to an ultimate off-takthe financing sources for this project reer. main unknown. Meanwhile, renewable Bosman says banks are still reluctant generating technology is more expensive about the support system, mainly beand the cost of building 1 MW can reach cause of the mechanism of taking over EUR 4 million. excess green certificates. UniCredit TiriTurnkey costs without VAT for the ac Bank representatives add that remain green sources are as follows, acnewable financing is constrained by the cording to Ghelasi: 1 MW of PV energy incentives system, the high generation costs EUR 1.95 million and is expected to cost and restrictions depending on the decrease to EUR 1.6 million in the next area. year. In highly efficient co-generation the “On the Romanian market it is difficult cost ranges from EUR 3.5-4 million for 1 to obtain long-term agreements for the MW, while in wind the cost goes from sale of electricity and the green certifiEUR 1.35 to 1.5 million. Small hydro is becates. Such agreements are executed on tween EUR 2.5 and 3.5 million but can the local market for a term of approxireach EUR 5 million, depending on the lomately two years, which is viewed by the cation. banks as insufficient for medium- or “Although the law governing the relong-term project financing,” says newable energy, law no. 220/2008 for the Bosman. promotion of the use of energy from reStavaru says there is a certain misnewable sources, has been in force since trust in the bankability of the legal frame2008, the support scheme provided by it, work which makes it difficult to raise as approved by the European Commisproject finance. Ghelasi adds that stratesion, has applied since the end of Octogic investors, which provide financing ber 2011, while the market is still waiting from their balance sheet and corporate for the norms for its application to come bank financing, have acquired projects in into force,” says Delia Bosman, partner at the “ready to build stages” in the last four law firm Dragne & Asociatii. months. Meanwhile, financial investors Stavaru of Bulboaca & Asociatii says rely on project financing provided by lopermitting procedures for green projects cal banks. However, these lenders are fulare bureaucratic and the connection to ly dependant on the existence of power the grid may also bring upgrade costs. purchase agreements (PPA) and GCs on The local authorities play a crucial role in the medium and long term. He warns the decision-making of investors and that this will sacrifice the profitability of frequent changes in legislation or unclear a project for the sake of securing bank fiareas may also prevent new investments. nancing. “Banks want to be sure that the developer has obtained the requisite land ovidiu.posirca@business-review.ro
POWER 13
www.business-review.ro Business Review | March 18 - 25, 2012
14 IN TOUCH FILM REVIEW
WHO’S NEWS Business Review welcomes information for Who’s News from readers. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro
Razvan Gheorghiu-Testa has become one of the supervisors of Tuca Zbarcea & Asociatii Tax, the law firm’s newly established specialized tax consultancy division. He is one of the founding partners of Tuca Zbarcea & Asociatii. Gheorghiu-Testa has 16 years of legal experience in corporate/M&A, real estate and taxation. Ever since the law firm was founded seven years ago, in addition to his role as coordinator of its real estate practice group, he has also coordinated the fiscal law practice. Over the years Gheorghiu-Testa has been directly involved in many of the most important real estate projects taking place in Romania, including acquisitions and disposals of property, investment and development projects, and finance.
Alexandru Cristea has joined Tuca Zbarcea & Asociatii Tax as tax partner. He has over ten years of professional experience in tax advisory, having previously worked for companies like Deloitte and PwC where he served as one of the coordinators of the indirect tax department. He has focused primarily on indirect taxation. Cristea also acted as a local consultant in the PHARE program for the implementation of EU-harmonized Romanian VAT legislation, and was involved in the drafting process of the law, as well as in organizing training sessions for professionals from the Romanian Ministry of Finance. He is an authorized fiscal consultant and holds an MBA in finance.
is an authorized fiscal consultant and holds a master’s degree in finance.
Dan Stoicescu has joined Constantinof & Associates law firm. With over 15 years of experience in the field of capital markets, he has been active both in the private sector, as a broker, and in the institutional area, where he managed the Monitoring and Investigation Directorate within the National Securities’ Commission. Subsequently, as a specialist, he assisted and advised the prosecutors within the Directorate for Investigating Organized Crime and Terrorism (DIICOT), on matters related to economic and financial crimes, operations involving securities and connected to the capital market. He is also a lecturer with the National Institute of Magistracy, on Business Criminal Law.
Ciprian Glodeanu has been promoted to partner at the Bucharest office of Wolf Theiss. He joined the law firm in 2006 and two years later became head of the real estate department. Along with Bryan Jardine, who is regional coordinator of the renewable energy consultancy, he set up the renewable energy practice of the Bucharest branch. Glodeanu has been a member of the Bucharest Bar since 2000 and is the president and a founding member of the Romanian Photovoltaic Industry Association. He began his career with Bostina & Asociatii where he was promoted to partner within six years.
Malina Titirez
has been appointed tax senior manager at Tuca Zbarcea & Asociatii Tax. He has over eight years of professional experience in fiscal advisory. He advised various businesses on a wide range of international and domestic tax issues, including direct corporate taxes and indirect taxes, and worked with a large group of multinational clients active in various industries. Chitu specializes in corporate tax issues, including transactional work, and has advised clients on how to structure their investments in Romania. He
is the new client service director of Exact Research & Consulting. With 12 years of experience in marketing research, Titirez graduated in sociology and has a master’s degree in communication and PR. In the past eight years she has held various coordinating positions with multinationals present in Romania. Titirez served as research & business intelligence manager at FrieslandCampina Romania, research manager at Ursus Breweries and marketing research supervisor at Coca-Cola Company She began her career with TNS-CSOP Romania.
ISSN No. 1453 - 729X
FOUNDING EDITOR Bill Avery EDITOR-IN-CHIEF Simona Fodor SENIOR JOURNALIST Otilia Haraga JOURNALISTS Simona Bazavan, Ovidiu Posirca COPY EDITOR Debbie Stowe COLLABORATORS Anda Sebesi ART DIRECTOR Alexandru Oriean PHOTO EDITOR: Mihai Constantineanu PHOTOGRAPHER Laurentiu Obae LAYOUT Beatrice Gheorghiu
Alin Chitu
The Kid with a Bike
Life cycle: Thomas Doret and Cécile de France star in this realistic and affecting work
DEBBIE STOWE
Twelve-year-old Cyril doesn’t have much. His mother is long gone. He has a father, who can’t be bothered with him. He has a place at a children’s home. Most importantly, he has a bike. At times, this movie, from Belgian filmmakers the Dardenne brothers, is almost painful to watch, as we wait for the next piece of cruelty or mistreatment to come Cyril’s way. Like much of the directors’ work, The Kid with a Bike has a naturalistic feel that positions the atmosphere close to documentary. Cyril’s plight feels real, which is why the film is so affecting. Yet at the same time, it alludes to the unreal, in the form of the fairy tale. A battle is being fought for the soul of motherless Cyril (Thomas Doret), between the dark forces in the woods (a gang of toughs trying to recruit the naïve youngster to do their dirty work) and salvation, in the form of kindly local hairdresser Samantha (Cécile de France). In other hands, such a plot could get mawkish. Not here: the Dardennes are sparing with the sentiment. Cyril is not depicted as an angel – he’s difficult, unruly and aggressive, frequently defying the benign staff at the children’s home and Samantha. Apart from a few of the characters who
can be seen as either entirely good or bad, the viewer is not prodded into making comfortable moral judgments. No back story is given for anyone. We don’t know if Cyril’s mother is alive or dead, why his dad is such a deadbeat or why a childless hairdresser would suddenly take in a wayward boy. We’re just presented with the events and left to form our own conclusions. Set in the bland Belgian suburbs, the locations appear innocuous but there are many dangers. Cyril’s treasured bike is frequently stolen. The bike is important, not just because it is the boy’s main means of getting around and therefore represents his self-determination, but also as a symbol of the attitudes of others. The local toughs try to steal his bike. His father previously sold it. Samantha buys it back. As in the 1948 Italian neorealist classic Bicycle Thieves, the bike is the one thing keeping Cyril’s head above water and its loss threatens to plunge him irredeemably into the underworld of petty crime. This is measured, confident filmmaking, a far remove from Hollywood sentiment and spoon feeding. Every scene has earned its place, and there is nothing frivolous here. The effect is a lean, serious work, whose lack of embellishment and ordinary settings and people can often make you forget you’re watching a movie. Credit for its believability and effectiveness must also go to the main actors. Cécile de France’s Samantha is a beacon of warmth and goodness and yet still human and plausible, while Thomas Doret – in his first role – infuses Cyril with a convincing mixture of anger, defiance, vulnerability and shyness. Cyril barely cracks a smile throughout the film. And we share his fear, pain and glimmer of hope all the while.
PUBLISHER Anca Ionita EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi MARKETING MANAGER Ana-Maria Stanca SALES & EVENTS Ana-Maria Nedelcu RESEARCH & SUBSCRIPTION Lili Voineag PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat
ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.32 Office: 031.040.09.31 Fax: 031.040.09.34 EMAILS Editorial: editorial@business-review.ro Sales: sales@business-review.ro Events: events@business-review.ro
Director: Jean-Pierre and Luc Dardenne Starring: Thomas Doret, Cécile de France On: Cinema City & Sun Plaza, Grand Cinema Digiplex Baneasa, Hollywood Multiplex, Noul cinematograf al regizorului roman, Sala Elvira Popescu